Barclays 2007 Annual Report Download - page 175

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Financial statements
24. Taxes, including deferred taxes
Income tax payable on taxable profits (‘current tax’), is recognised
as an expense in the period in which the profits arise. Income tax
recoverable on tax allowable losses is recognised as an asset only to
the extent that it is regarded as recoverable by offset against current
or future taxable profits.
Deferred income tax is provided in full, using the liability method, on
temporary differences arising from the differences between the tax bases
of assets and liabilities and their carrying amounts in the consolidated
financial statements. Deferred income tax is determined using tax rates
and legislation enacted or substantially enacted by the balance sheet date
and is expected to apply when the deferred tax asset is realised or the
deferred tax liability is settled. Deferred and current tax assets and liabilities
are only offset when they arise in the same tax reporting group and where
there is both the legal right and the intention to settle on a net basis or to
realise the asset and settle the liability simultaneously.
25. Segment reporting
Business segments are distinguishable components of the Group that
provide products or services that are subject to risks and rewards that are
different to those of other business segments. Geographical segments
provide products or services within a particular economic environment
that is subject to risks and rewards that are different to those of
components operating in other economic environments. Business
segments are the primary reporting segments. Group costs are allocated
to segments on a reasonable and consistent basis. Transactions between
segments are generally accounted for in accordance with Group policies
as if the segment were a stand-alone business with intra-segment
revenue and costs being eliminated in Head office.
The analyses by geographical segment are based on the location of
the customer.
26. Cash and cash equivalents
For the purposes of the cash flow statement, cash comprises cash on
hand and demand deposits, and cash equivalents comprise highly liquid
investments that are convertible into cash with an insignificant risk of
changes in value with original maturities of less than three months.
Repos and reverse repos are not considered to be part of cash equivalents.
27. Trust activities
The Group commonly acts as trustees and in other fiduciary capacities that
result in the holding or placing of assets on behalf of individuals, trusts,
retirement benefit plans and other institutions. These assets and income
arising thereon are excluded from these financial statements, as they are
not assets of the Group.
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